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Every Bond Bear's Worst Nightmare In 1 Simple Chart
"Everyone" knows that yields have to rise when the Fed tightens, right? With yields so low, "everyone" knows that bonds are the worst investment if The Fed begins to hike rates, right? Wrong! As the following chart from Goldman Sachs shows - over the last 32 rate-hike cycles, 10Y bond yields have compressed after the rate-hike cycle begins... So be careful what you wish for on Fed tightening!
Post-hike, 10Y yields have dropped notably in the next few years of the cycle...
We know it's annoying when 'facts' and 'data' get in the way of a narrative that everyone would love to come true... but history simply tells us that mainstream is simply misled and then squeezed on their short bond positions. Simply put, if rates haven't lifted by the time the Fed raises rates (if that ever happens) then they never will and the 'turning Japanese' meme will be proven correct once again.
Chart: Goldman Sachs
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But the chart comes from Goldman so you know what to do.
nailguns?
$8.1 trillion of treasuries required to be issued every year to cover annual budget deficit + roll-over of maturing treasuries.
http://cnsnews.com/news/article/terence-p-jeffrey/roll-over-plan-treasury-needed-pay-record-75t-maturing-debt-fy-2013
I'd be worried about rising rates if I was the Fed.
The right to arm bears?
Did someone mention "Bear"....Here is the real Bear. Putin. If you have time, I present his most recent speech in English. This man speaks the truth and calls out the United States on everything we are doing. I love this guy.
http://www.lewrockwell.com/2014/10/paul-craig-roberts/why-is-putin-hated/
So I assume you're writing from Moscow?
From your link:
Let me remind you that we were the first country to support the American people back then, the first to react as friends and partners to the terrible tragedy of September 11.
Does this suggest he doesn't know that 9/11 was an obvious inside job (witness WTC7 falling down)? I always am leary of anything I read that adopts or adapts to the ridiculous government conspiracy theory (actually, story ... not theory) of what they did that day.
Why don't we hear anyone anywhere (even our enemies) pointing this out at such opportunities as this speech? Certainly it's not because the evidence is not overwhelming.
I've been conducting an ongoing informal poll. I have the video on my phone of WTC7 falling down. Anytime someone engages me in a conversation on current events I first ask them to participate. I show them the video and then ask them to tell me what they are looking at. So far, only 9 out of 114 people I have asked knew it was WTC7 and the implications of that. Further, even with that obvious evidence nearly all refuse to believe our government did 9/11.
Any of you reading this ought to try such a poll for yourselves. I guarantee you will see similar results. If nothing else it tells you that you might be wasting your time talking to most people about current events because they have such flawed sources of information.
Do you suppose Putin doesn't know about WTC7? I would hope his intelligence sources are up to exposing what our propaganda and disinformation spewing media has poured into our citizenry ... and most world inhabitants.
Turn my laptop upside down?
The jawboning and not raising rates could last into next year.
"Considerable time" could be the phrase used for a considerable time (next October).
The rumor is they will raise rates next Spring/Summer; what would that do to home sales in their prime season?
And what would it do to home prices, and Fannie/Freddie, and Student Loan default rates, and HELOC payments? Not to mention the derivatives house-of-cards.
They either won't do it - or they will ramp rates a la' Greenspan 2004-2007 to squeeze the middle, crash the markets, and rake the sheeple's chips off the green felt - again.
We only have taper..which is still QE.
Next up will be normallization not tightening.
If the Rep's take Congress, I can see them raising interest rates almost immediately. This, to back Rep's into a corner, like August 2011. Obama the Untouchable Negro guarantees the Rep's are useless, in advance.
I'm thinking the Fed will raise rates following the bond market as it wakes from the QE-induced coma.
I think the Fed is going to step aside for a spell, let nature take its course, then come back to fix the mess.
The financial markets NEED 5 years of bankrupty, restructuring, contract abrogations, debt repudiation, lawyers in fisticuffs ...
THEN, they can turn the money machine back on.
:chickles:
I do think they'll let it fall a bit, but never near enough for a real cleansing event. More like 10%.
What would Goldman a Muppet do?
What would Goldman a Muppet do?
Gain..... err..... lose money. Go Kermit!!!
long the bond, tried and true given 18 trillion, unless?????....
If bond shorts need another ass they'll be getting one handed to them should they dare.
Paper Mills
Anyone heard from "economatters" dude?
The contributor that foamed at the mouth for months about shorting treasuries. How tbond bulls would be every kind of torturously butchered.
I am betting that they carried him out on a stretcher last week.
If the weak psychology gets any bit worse, there will be no turning it around.
Deflationary vortex.
Then fed goes zimbabwe.
Get ready for that.
Unlike Greenspan's tenure - or even Bernanke's during the 'crisis', it is now politically untenable to let this market 'wash out' as some suggest. The cascading, downstream effects of such a hands-off policy...? Let your imagination run wild for a moment - say like, Ferguson MO gone exponential... In other words, there is a set of negative market 'numbers' or indicators at which the Fed Will intervene, monetary skullduggery behind the scenes notwithstanding. All one need to is wait and watch it play out.
there are two bond trades.........
Flat and long............
Ask any of the shorts sisnce 2008 what they think.............
There are more dead bodies in the short bond ditch than anywhere..............\
It is the best preforming market this year and CNBS keeps telling us to short it and buy stoks.................
Buffalo bill is the stock market and the fed is in the hole
It rubs the lotion on its skin or else it gets the hose again?So the FED stops buying bonds... and the price of bonds goes higher; makes perfect sense.
Hey guys. Can we all just agree once and for all that rates aren't going to rise in our lifetimes? Love Jessica.